Whether to Ask the Hotel or Hit the Web

In response, the agency sites are forced to concentrate on other ways to keep and attract customers.

'It used to be that you would book through an online agency because of the savings,' which for one night 'could have been upward of $30,' said Lorraine Sileo, an analyst at PhoCusWright, an online travel consulting and research company.

The cheaper rates often came with stricter cancellation policies and requirements for full payment when booking. Travelers accepted those conditions because the savings were significant.

'That was yesteryear,' Ms. Sileo said. During the travel slump after the Sept. 11 attacks, hotels were eager to work with discount and travel agency sites to fill rooms. But now that the economy is stronger, the hotel companies have been working to cut out the middleman.

If a customer who reserves with Hilton finds a lower rate for the same stay at another Web site in the next 24 hours, for example, Hilton will match the rate and throw in either a $50 American Express gift check or a $50 discount. Marriott and Starwood Hotels also offer rate guarantees.

As another incentive for direct booking, major hotel chains have largely stopped offering loyalty program rewards to guests who reserve rooms at negotiated discounts from the online travel agencies.

The efforts have been working. In 2004, half the $14.5 billion in online hotel bookings with hotel companies based in the United States were made through online travel agencies, and half were made directly with hotel sites, according to PhoCusWright. Last year, 55 percent of the estimated $23.5 billion in online hotel bookings were made directly, with hotels cutting the online agencies' share to 45 percent.

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Source - New York Times


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